Abbott Laboratories 2014 Annual Report Download - page 44

ABBOTT 2014 ANNUAL REPORT
42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4—SUPPLEMENTAL FINANCIAL INFORMATION
Other (income) expense, net, for 2014 primarily relates to impair-
ment charges related to non-publically traded equity securities
partially oset by gains from the sales of equity securities. The loss
on the extinguishment of debt of $18million in 2014 and $1.35bil‑
lion in 2012 relates to the early redemption of approximately
$500million and $7.7billion of long‑term notes, respectively.
The loss in 2012 consists of the premium paid on the notes and
the write o of deferred financing costs totaling $1.83billion
and was partially oset by a gain of $479million related to the
unwinding of interest rate swaps related to a portion of the debt.
The detail of various balance sheet components is as follows:
(inmillions) 2014 2013
Long‑term Investments:
Equity securities $212 $÷93
Other 17 26
Total $229 $119
The increase in long‑term investments from December31, 2013
to December31, 2014 is due primarily to the acquisition of CFR
Pharmaceuticals in 2014.
(inmillions) 2014 2013
Other Accrued Liabilities:
Accrued rebates payable to government agencies $÷÷«88 $÷«136
Accrued other rebates (a) 239 220
All other (b) 2,616 3,144
Total $2,943 $3,500
(a) Accrued wholesaler chargeback rebates of $50 million and $90 million at December 31, 2014
and 2013, respectively, are netted in trade receivables because Abbott’s customers are invoiced
at a higher catalog price but only remit to Abbott their contract price for the products.
(b) 2013 includes acquisition consideration payable of approximately $400million related
primarily to the acquisition of Piramal Healthcare Limited’s Healthcare Solutions business.
(inmillions) 2014 2013
Post‑employment Obligations and Other
Long‑term Liabilities:
Defined benefit pension plans and post‑employment
medical and dental plans for significant plans $2,875 $1,818
Deferred income taxes 860 466
All other (c) 1,853 2,500
Total $5,588 $4,784
(c) 2014 includes $1.3 billion of gross unrecognized tax benefits, as well as approximately
$220 million of acquisition consideration payable. 2013 includes $1.3 billion of gross
unrecognized tax benefits, as well as $70 million of acquisition consideration payable.
Since January 2010, Venezuela has been designated as a highly
inflationary economy under U.S. GAAP. In 2014, the government of
Venezuela operated multiple mechanisms to exchange bolivars into
U.S. dollars. In 2014, Abbott continued to use the ocial rate of
6.3Venezuelan bolivars to the U.S. dollar to report the results, finan‑
cial position, and cash flows related to its operations in Venezuela
since Abbott continued to qualify for this exchange rate to pay for
the import of various products into Venezuela. Abbott cannot pre-
dict whether there will be a devaluation of the Venezuelan bolivar
or whether it will continue to be able to exchange bolivars at the
6.3rate. As of December31, 2014, Abbott had net monetary assets
that are subject to revaluation in Venezuela of approximately
$240million. In 2014, revenue from operations in Venezuela
represented approximately 2% of Abbott’s total net sales.
The operating results of Abbott’s developed markets branded
generics pharmaceuticals, animal health and AbbVie businesses,
which are being reported as discontinued operations are as follows:
(inmillions)
Year Ended December31 2014 2013 2012
Net Sales
Developed markets generics
pharmaceuticals and animal
health businesses $2,076 $2,191 $÷2,444
AbbVie — — 18,380
Total $2,076 $2,191 $20,824
Earnings Before Tax
Developed markets generics
pharmaceuticals and animal
health businesses $÷«505 $÷«480 $÷÷«525
AbbVie — — 5,958
Total $÷«505 $÷«480 $÷6,483
Net Earnings
Developed markets generics
pharmaceuticals and animal
health businesses $÷«397 $÷«395 $÷÷«342
AbbVie 166 193 5,384
Total $÷«563 $÷«588 $÷5,726
Income tax expense (benefit) included in discontinued operations
totalled $(58)million in 2014, $(108)million in 2013 and $757mil‑
lion in 2012.
The assets of the operations held for disposition and the liabilities to
be assumed in the disposition related to the businesses noted above,
as well as the AbbVie assets and liabilities discussed in Note 2 are
classified as held for disposition in the Consolidated Balance Sheet
as of December31, 2014. Prior period balance sheets are not adjusted
when a business is designated as being held for sale. The cash flows
associated with the developed markets branded generics pharma-
ceuticals businesses will be included in Abbott’s Consolidated
Statement of Cash Flows up through the date of disposition. The
following is a summary of the assets and liabilities held for disposition:
(inmillions)
December31 2014 2013
Trade receivables, net $÷«498 $163
Total inventories 254 243
Prepaid expenses, deferred income taxes, and
other receivables 140 32
Current assets held for disposition 892 438
Net property and equipment 125 28
Intangible assets, net of amortization 804 —
Goodwill 950 —
Deferred income taxes and other assets 55 38
Non‑current assets held for disposition 1,934 66
Total assets held for disposition 2,826 504
Trade accounts payable 423 285
Salaries, wages, commissions and other accrued
liabilities 257 101
Current liabilities held for disposition 680 386
Post‑employment obligations, deferred income
taxes and other long‑term liabilities 108 7
Total liabilities held for disposition $÷«788 $393